Enterprises across Southeast Asia are entering a new phase of artificial intelligence adoption, as companies move beyond using AI for productivity gains towards embedding it into core business processes, growth models and customer experiences.
For Avanade Chief Technology and Innovation Officer Aaron Reich (pic), the shift marks an important turning point for businesses seeking to extract real value from AI, particularly as the region’s different constraints and adoption patterns could allow it to leapfrog more mature Western markets.
“One of the core things we are seeing clients challenged with is finding the value of AI,” Reich said in an exclusive interview with BusinessToday Malaysia at Avanade’s Kuala Lumpur AI Modernisation Hub in Tun Razak Exchange.
For many organisations, the early conversation around AI has centred on efficiency, cost reduction and automation. Reich, however, believes the larger opportunity lies in applying AI to business growth and transformation.
“I am not a believer that productivity is the way to manage and measure AI’s value. There is so much opportunity when you look at AI from the growth side,” he said.
“That means moving from using AI ‘on’ the business — through tools such as chat, copilots and productivity assistants — to using AI ‘in’ the business by redesigning operations, revenue generation and customer engagement around AI-enabled capabilities.”
Reich believes the next 12 months will be critical for organisations that are prepared to identify where AI can transform business models and core processes, rather than merely improve existing workflows.
This would require companies to look beyond the deployment of individual AI tools and examine how AI can be built into the way businesses operate, serve customers and create new sources of revenue.
“AI ‘on’ the business is productivity, Copilot and chat. AI ‘in’ the business is about transforming core business processes,” he said.
KL hub as regional AI delivery centre
In Malaysia, that transition is reflected in Avanade’s KL AI Modernisation Hub, which the company sees as a regional centre to support AI delivery for clients across Southeast Asia and the wider Asia-Pacific region.
Avanade, founded as a joint venture between Microsoft and Andersen Consulting, now Accenture, describes itself as a leading Microsoft expert helping organisations modernise securely by combining human ingenuity and AI innovation.
Reich said one of the reasons Avanade established the hub in Kuala Lumpur was the level of investment and policy attention Malaysia is directing towards digital and AI-related programmes.
He said this reflects a “safe and governed but also forward-thinking” approach, which is important as businesses seek to scale AI adoption responsibly.
The hub is designed to bring together the different capabilities needed for AI delivery. Unlike traditional software development, AI implementation often requires a combination of data engineering, strategy, product thinking and technical execution.
“You are going to need a data engineer, a strategist and a product mindset in there as well. The hub gives us a place to bring those skillsets together,” he said.
In this light, Avanade’s ambition is to continue growing the talent base in Kuala Lumpur as it undertakes more AI work for clients across Southeast Asia, while also using the hub as a centre of gravity for AI delivery across its Asia-Pacific business.
Reich said Malaysia and Southeast Asia have the potential to move quickly because their market structures, business needs and constraints differ from those in the West.
This, he said, could result in new products, services and adoption models emerging from the region, rather than simply following templates developed in more mature markets.
“I think the mindset of Southeast Asian governments is highly innovative. There will be new products and services created in Southeast Asia that cannot be created anywhere else in the world because adoption is going to happen in a very different pattern,” he said.
Reich was in Kuala Lumpur as part of Avanade’s World Tour. During his keynote session, he spoke about the opportunities and challenges facing enterprises as they adopt AI, including the need to balance speed with governance, regulation and risk management.
He said businesses should avoid rushing blindly into AI adoption, especially as different industries face different regulatory requirements and risk profiles.
The challenge, he said, is to move fast enough to capture value while ensuring that AI implementation remains secure, governed and aligned with business outcomes.
AI’s wider potential
Beyond enterprise transformation, Reich believes AI’s longer-term impact could be felt in fields such as life sciences and material science, where it may help accelerate discovery and innovation.
In life sciences, he pointed to the potential for AI to support the discovery of new drug formulations and more specific approaches to targeting diseases. In material science, he said AI could help identify more sustainable compound structures and alternatives to materials that are currently labour- and water-intensive to produce.
These areas, he said, could become game changers if their potential is realised.
For Reich, the current AI wave carries echoes of earlier technology shifts, including the rise of cloud computing. Before Microsoft Azure was publicly known as Azure, he was involved in early work at Accenture and Avanade to build public cloud capabilities as the industry began moving away from traditional applications and datacentres.
While the technology is different, he said the pattern is familiar. Clients are facing a major platform shift, and consulting firms need to be slightly ahead of the market to help them navigate it.
As Avanade’s CTIO, Reich’s role covers both the company’s internal AI transformation and its client-facing work globally. This includes examining how Avanade uses AI internally, how it develops AI capabilities among its people and how it prepares for emerging areas such as physical AI.
He said technology leaders today need to understand the connection between technology change, ecosystem shifts and people, especially as AI reshapes both client expectations and the professional services industry itself.
For companies such as Avanade, Reich said the challenge is to continue delivering for clients today while preparing for a very different future.
“The important thing is figuring out what the new looks like while still delivering today. There is a technology leadership lens and a people lens that have to come together for that transformation to happen,” he concluded.
